IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Kuaishou Technology / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> is the second-largest short video platform by average DAUs (daily active users) in 1H20, according to iResearch. Users access the platform primarily through a family of mobile apps comprising <em>Kuaishou Flagship, Kuaishou Express</em> and <em>Kuaishou Concept</em>, which is collectively referred to as the Kuaishou App.</p>
<p>Kuaishou is seeking to raise $5 billion at a $50 billion valuation as early as this month, according to press reports. The rumoured valuation is a significant increase to the January 2020 Series F round - a raise of $3 billion at a $28-30 billion valuation, according to press reports. </p>
</div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-initiation-dancing-to-its-own-tune" target="_blank" data-smartkarma-citation="insights:45032" rel="noopener">Kuaishou IPO Initiation: Dancing to Its Own Tune</a>, we opined that Kuaishou offers public market investors the first opportunity to gain direct exposure to China’s short-video platform market. While Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In this note, we take a first look at Kuaishou's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.</p></div></div></div>


Beijing Kuaishou Technology Co Ltd (1496219D CH) is the second-largest short video platform by average DAUs (daily active users) in 1H20, according to iResearch. Users access the platform primarily through a family of mobile apps comprising Kuaishou Flagship, Kuaishou Express and Kuaishou Concept, which is collectively referred to as the Kuaishou App.
Kuaishou is seeking to raise $5 billion at a $50 billion valuation as early as this month, according to press reports. The rumoured valuation is a significant increase to the January 2020 Series F round - a raise of $3 billion at a $28-30 billion valuation, according to press reports. 
In Kuaishou IPO Initiation: Dancing to Its Own Tune, we opined that Kuaishou offers public market investors the first opportunity to gain direct exposure to China’s short-video platform market. While Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In this note, we take a first look at Kuaishou's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Alibaba Group Holding  / Equity Capital Markets

<p>2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). While the year started off on a precarious note for ECM, it ended with very strong momentum. Even as IPOs have hogged the limelight in 2020, we actually ended up covering more than twice the number of placements as IPOs. </p><p>We ended 2020 with an accuracy rate of 72.7% across 88 IPOs that we covered and 70.1% across 174 placements. While our placements hit rate improved, our IPO hit rate took a dip from 2019.</p><p>For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea), including China ADRs.</p>

2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). While the year started off on a precarious note for ECM, it ended with very strong momentum. Even as IPOs have hogged the limelight in 2020, we actually ended up covering more than twice the number of placements as IPOs. We ended 2020 with an accuracy rate of 72.7% across 88 IPOs that we covered and 70.1% across 174 placements. While our placements hit rate improved, our IPO hit rate took a dip from 2019.For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea), including China ADRs.

Aequitas 2020 IPOs and Placements Performance - IPOs in the Limelight but Placements Stole the Show

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Singapore based internet company, <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>, benefitted from the COVID-19 pandemic as Sea’s three main businesses lines, mobile gaming platform called Garena, an e-commerce platform called Shopee and a fintech business called SeaMoney experienced a rapid acceleration of revenue growth following the COVID-19 outbreak. As a result, the company’s share price surged over 400% during 2020.</li>
<li>In two previous insights on Sea Ltd, we analysed the fundamentals and long-term prospects of the company’s main business lines. This insight focuses on Sea’s valuation.</li>
</ul>


Singapore based internet company, Sea Ltd (SE US), benefitted from the COVID-19 pandemic as Sea’s three main businesses lines, mobile gaming platform called Garena, an e-commerce platform called Shopee and a fintech business called SeaMoney experienced a rapid acceleration of revenue growth following the COVID-19 outbreak. As a result, the company’s share price surged over 400% during 2020.
In two previous insights on Sea Ltd, we analysed the fundamentals and long-term prospects of the company’s main business lines. This insight focuses on Sea’s valuation.


Sea Ltd Valuation: SOTP Suggests Over 40% Downside Risk

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul class="">
<li>Tencent’s games had disappeared on Huawei’s app store for one day.</li>
<li>The State Administration of Market Regulation fined Alibaba, JD.com, and Vipshop RMB500,000 each for “unfair pricing”.</li>
<li>The Ministry of Culture and Tourism announced that it would continue the suspension of cross-border group tour during the vacations of the New Year’s Day and the Chinese New Year.</li>
</ul>


Tencent’s games had disappeared on Huawei’s app store for one day.
The State Administration of Market Regulation fined Alibaba, JD.com, and Vipshop RMB500,000 each for “unfair pricing”.
The Ministry of Culture and Tourism announced that it would continue the suspension of cross-border group tour during the vacations of the New Year’s Day and the Chinese New Year.


China Internet Weekly (4Jan2021): Tencent’s Conflict with Huawei, Authorities’ Ban on New Year Tour

<div><p><a href="https://www.smartkarma.com/entities/yidu-tech-inc" target="_blank" data-smartkarma-citation="entities:29245:1" rel="noopener">Yidu Tech Inc (2158 HK)</a> is a software company that offers healthcare solutions built on big data and artificial intelligence (AI) technologies. Yidu ranked No.1 in terms of revenue among all healthcare big data solution providers in China in 2019 with a market share of 5.0% in the healthcare big data solutions market in China, according to EY. At the proposed IPO price range of HK$23.50-26.30 per share, Yidu will have a market cap of HK$21,191.4-23,716.3 million ($2.7-3.1 billion). At the mid-point of the IPO price range, the total net proceeds are HK$3,691.7 million ($476 million). </p></div><div><p>Eight cornerstone investors will subscribe for $210 million of the offer shares (41.78% of the offer shares at the mid-point of the price range). The cornerstone investors are OrbiMed, Canada Pension Plan Investment Board, Brunei Investment Agency, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, Kerry Holdings, Matthews Funds, 3W Fund Management and China Orient Asset Management.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/yidu-tech-ipo-initiation-patient-revolution" target="_blank" data-smartkarma-citation="insights:46392" rel="noopener">Yidu Tech IPO Initiation: Patient Revolution</a>, we stated that Yidu is an attractive play on China’s healthcare industry rising spend on IT and data services. Overall, we would participate in the IPO due to an attractive IPO price range.</p></div></div></div>

Yidu Tech Inc (2158 HK) is a software company that offers healthcare solutions built on big data and artificial intelligence (AI) technologies. Yidu ranked No.1 in terms of revenue among all healthcare big data solution providers in China in 2019 with a market share of 5.0% in the healthcare big data solutions market in China, according to EY. At the proposed IPO price range of HK$23.50-26.30 per share, Yidu will have a market cap of HK$21,191.4-23,716.3 million ($2.7-3.1 billion). At the mid-point of the IPO price range, the total net proceeds are HK$3,691.7 million ($476 million). Eight cornerstone investors will subscribe for $210 million of the offer shares (41.78% of the offer shares at the mid-point of the price range). The cornerstone investors are OrbiMed, Canada Pension Plan Investment Board, Brunei Investment Agency, Tencent Holdings (700 HK), Kerry Holdings, Matthews Funds, 3W Fund Management and China Orient Asset Management.In Yidu Tech IPO Initiation: Patient Revolution, we stated that Yidu is an attractive play on China’s healthcare industry rising spend on IT and data services. Overall, we would participate in the IPO due to an attractive IPO price range.

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Kuaishou IPO: Valuation First Look

Kuaishou is seeking to raise $5 billion at a $50 billion valuation as early as this month. Overall, based on valuation analysis, we think that the...

Arun George

Aequitas 2020 IPOs and Placements Performance - IPOs in the Limelight but Placements Stole the Show

2020 marked our second year of operations as an Independent Research Company, and our fifth year covering ECM. In 2020 we had an accuracy rate of...

Sumeet Singh

Sea Ltd Valuation: SOTP Suggests Over 40% Downside Risk

The total EV of Sea’s three main segments is US$ 57.6 billion compared to Sea’s current EV of US$ 100.4 billion. Our SOTP valuation implies 42%...

Oshadhi Kumarasiri

China Internet Weekly (4Jan2021): Tencent’s Conflict with Huawei, Authorities’ Ban on New Year Tour

Tencent’s games had disappeared on Huawei’s app store for one day. The authorities fined BABA, JD, VIPS for “unfair pricing”. The authorities...

Ming Lu

Yidu Tech IPO: Valuation Insights

At the mid-point of the IPO price range, the total net proceeds are HK$3,691.7 million ($476 million). Overall, we would participate in the IPO due...

Arun George

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